Senator Amy Klobuchar (D-MN.) is sponsoring a bill that calls on wireless companies to prorate early termination fees for cell phone subscribers that sometimes are as high as $200 and are disguised as taxes on bills.
“I do not believe that this limited regulatory scheme is now working given the industry size and its domination by four major carriers,” said Sen. John Rockefeller (D-W.V.), before the Senate Commerce Committee and one of the bills sponsors. “I believe it’s time to revisit the entire regulatory framework that governs wireless service.”
Wireless companies are opposed to the bill and Verizon Wireless CEO Lowell McAdam told the committee that the legislation was not necessary and could be harmful to the consumer. “A set of regulations will establish a minimum requirement that when a carrier diverts from that minimum requirement, they will be questioned by regulators across the country,” McAdam said. “All that will do is slow down a very innovative and dynamic industry.”
Some wireless providers have started to address the issue of termination fees. On Tuesday AT&T said that it planned to begin prorating it’s early termination fee of $175 next year and Verizon Wireless implemented early prorated termination fees last year.
Republicans were skeptical of the bill saying that government regulation was not the way to solve the problem. “Our government has consistently shown that it cannot effectively manage complex functions,” said Sen. Jim DeMint (R-S.C.). “To suggest we are going to design a system that more effectively protects consumers than a competitive market is well intended but naive.”
Verizon’s McAdam said the company had done well because it treats its customers fairly and that competitive markets punish bad behavior according to Reuters.
